Market manipulation fraud is a common white collar crime and involves accusations of artificially increasing the volume of trade to increase the price of a stock. These types of charges should not be taken lightly, so if you have been accused of market manipulation, it is very important to speak to a white collar crime attorney who can evaluate your case.
What is Market Tamper Fraud?
Market manipulation fraud involves creating artificial buying pressure for a certain action. This increase in the volume of transactions is usually generated by convincing investors to buy security stocks through the use of deceptive sales practices, although manipulation can involve a series of techniques, which affect the supply of a stock. Other common examples include:
- Disseminate misleading information about a company;
- Manipulate quotes, prices or operations;
- Incorrectly limiting the number of shares that are available to the public.
In general, once these techniques have been used to affect the supply of a certain stock or bond, the shares are sold on the inflated market for profit.
Types of Market Manipulation
There are a variety of ways to manipulate the market. However, the most common include the following:
- Over-rotate, which occurs when a trader places buy and sell orders at the same price in an effort to attract other investors and increase the stock price;
- Painting the Trade, which involves a group of traders spreading rumors about a particular action to increase its price;
- Commercial Laundering, which involves the sale and re-purchase of the same stock in order to generate activity and thus increase the price;
- The manipulation known as “Bear Raiding”, which occurs when a trader tries to lower the price of a short sale share;
- Cornering the market, which means that a trader has bought enough of a particular type of stock, commodity, or asset, to gain control of his offer and ultimately price it;
- Insider trading, which occurs when traders, who have confidential information about a company, use that knowledge to make a profit or avoid losses by buying or selling stocks;
- Farce, which involves a trader placing large orders for stocks or bonds to convince others that the price is changing and then quickly canceling orders and placing new ones.
Unfortunately, the line between legitimate trade and illicit market manipulation can be blurred, and as a result, many innocent merchants face serious fraud charges. For this reason, it is especially important that those who have been accused of market manipulation speak to a white collar crime attorney as soon as possible.
Call Today to Schedule an Individual Meeting with an Experienced White Collar Crime Lawyer
If you have been accused of illegally manipulating the market, there are a number of defenses that could help exonerate you. For more information about these options, please contact Jeffrey S. Weiner, PA Miami Criminal Defense Attorneys at (305) 670-9919 today. A member of our legal team is eager to address your concerns and evaluate your case.